Weaker-than-expected U.S. housing sales and durable goods orders on Friday drove U.S. stocks lower, and world and European stocks followed that trend on Monday.

Leaders of the Group of 20 rich and developing nations pledged on Friday to bring the global economy back into balance but their statement contained few surprises and investors are already looking ahead to U.S. employment data at the end of this week.

Global equities and other higher risk assets have risen sharply in the last six months on growing optimism about the economic outlook, but markets are starting to run out of impetus, analysts say.

“Investors are a little bit reluctant to add to their risk positions,” said Koen De Leus, economist at KBC Securities.

“The market is going to have a very good look at macroeconomic numbers this week. If some of these figures disappoint, then the market is going to go down further.”

Analysts are starting to question whether the global recovery is V-shaped, or if it could be W-shaped, with a second dip to come.

The MSCI world equity index <.MIWD00000PUS> was down 0.52 percent at 282.94, bringing losses since Sept 22 to 3 percent.

U.S. stock index futures , however, were indicating a slightly stronger open on Wall Street after the market scored a third consecutive day of losses on Friday.

The FTSEurofirst 300 index <.FTEU3> hit its lowest in nearly three weeks before trimming losses to 982.53, down 0.14 percent from the U.S. close.

GERMAN STOCKS UP

German stocks <.GDAXI>, however, rose 1.3 percent with particularly strong gains in utilities E.ON and RWE , on expectations of longer lifetimes for German nuclear power plants as a result of the German election.

German Chancellor Angela Merkel’s conservatives won a weekend parliamentary election with the pro-business Free Democrats (FDPP), enabling her to end her awkward four-year-old partnership with the Social Democrats (SPD).

“(This) government provides the greatest opportunities for equity market-friendly reforms compared to other party combinations,” said Tammo Greetfeld, equity strategist at Unicredit, in a client note.

The yen, typically regarded as a safe-haven currency, surged to an eight-month high against the dollar as Japanese officials waved off any plans to stem the currency’s rise.

The yen later gave up some gains as Finance Minister Hirohisa Fujii changed gear on his comments during the course of the day, saying yen gains were becoming one-sided just hours after saying the rise was “not abnormal”.

The dollar fell as far as 88.26 yen before trimming losses to 89.35, down 0.31 percent.

However, the dollar hit a 2-1/2 week high against an index of currencies <.DXY> and a 13-day high against the euro as the U.S. currency also attracted safe-haven flows.

Funds are starting to shift money home ahead of the quarter-end later this week, analysts say.

Crude oil dipped 20 cents to $65.82 a barrel .

Euro zone government bonds also benefited from safety trades, with 10-year yields briefly hitting a one-month low.

December Bund futures were up 5 ticks, trimming earlier gains.

Sept 28 (Reuters)

Shares of Ford were up 7 percent at $8.58 before the bell after senior company executives said the automaker was on track to post its first monthly sales increase in two years.

In banking news, Barclays PLC reported an 8 percent rise in half-year profit, while HSBC Holdings PLC said its first-half profit halved from a year ago, but the results were better than the analyst consensus forecast.

“The greatest difficulty has been in financials, so the gains in HSBC and Barclays (are) adding to optimism and (suggest) that the worst may be over,” said Andre Bakhos, president of Princeton Financial Group, in New Brunswick, New Jersey.

“It’s comforting to see that we are in a global rebound in earnings.”

The Select Sector SPDR Financial ETF was up 2.2 percent before the bell.

A rise in oil prices was also poised to underpin the broader market, with U.S. front-month crude up 2.4 percent, or $1.65, to $71.10 a barrel.

S&P 500 futures rose 10 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures climbed 74 points, and Nasdaq 100 futures were 17.00 points higher.

The rise in U.S. stock index futures suggested that indexes will open up about 1 percent or more. The benchmark S&P 500 <.SPX> could begin trading at a 9-month high, very close to the psychologically important 1,000 level, after registering its best five-month winning streak since 1938 on Friday.

In Europe stocks were up more than 1 percent.

3M Co shares rose 2.4 percent to $72.22 before the bell after Goldman Sachs upgraded the Dow component to “buy” from “neutral.”

Ford, due to report its July sales later in the day, is among the primary beneficiaries of the federal government’s “Cash for Clunkers” incentive program that took effect on July 24.

The Senate on Monday is due to vote on extending the program to stimulate auto sales after the U.S. House approved $2 billion for it on top of an initial $1 billion in June.

The economic calendar includes the Institute for Supply Management’s manufacturing index due at 10 a.m. (1400 GMT). A Reuters poll of economists forecast a July reading of 46.2 from 44.8 in June.

NEW YORK, Aug 3 (Reuters)

Spot gold was bid at $935.10 an ounce at 1325 GMT, against $933.30 an ounce late in New York on Thursday. It earlier hit a session high of $939.65. U.S. gold futures for August delivery on the COMEX division of the New York Mercantile Exchange edged up 50 cents to $935.40 an ounce.

The euro gave up ground against the U.S. currency after data released on Friday showed the U.S. economy contracted at a slower-than-expected pace in the second quarter, which analysts said backs views the recession is winding down.

“The U.S. GDP data was fairly good; it is still contracting but at a much slower pace, much better than the first quarter,” said Andrey Kryuchenkov, an analyst at VTB Capital.

“But the personal consumption data wasn’t so good,” he added. “Inflation is not there yet, that would weigh on gold.”

Gold is broadly tracking moves in the dollar within a narrow range. Dollar weakness tends to benefit gold, as it makes the metal cheaper for holders of other currencies.

The dollar fell versus a basket of currencies in earlier trade as a rise in stock markets sharpened appetite for currencies seen as higher risk.

But equity markets fell in Europe and stock index futures weakened in the United States after the data, which also showed the economy contracted more than previously reported in the first quarter of the year.

Oil prices also fell more than 2 percent as investors worried about demand weakness. Strength in crude can benefit gold, which is often bought as an inflation hedge.

DEMAND TAILS OFF

Underlying demand for gold remains weak, with a pick-up in sales in leading gold market India midweek tailing off towards the weekend and flows into gold-backed exchange-traded funds still stagnant.

But a World Gold Council official told Reuters India’s gold demand may pick up from August as pent-up demand is seen boosting sales.

Meanwhile Africa’s top gold producer AngloGold Ashanti said it will miss its output target for the year, adding that it will wind up its hedge book of forward sales by 2014.

Elsewhere silver was flat at $13.45 an ounce, platinum was at $1,184.50 an ounce against $1,179.50, and palladium was at $255.50 against $256.50.

Aquarius Platinum Ltd said on Friday its quarterly attributable production was up one percent from the previous quarter to 98,258 ounces.

Prices of platinum — consumed primarily by the car industry for use in catalytic converters — edged above $1,200 earlier this week on hopes economic stability would lift car demand.

But despite an expected fourth-quarter recovery in the European car market, analysts were cautious towards platinum.

VM Group analyst Matthew Turner said a third-quarter demand slump in Europe, a key market for platinum as its cars are usually diesel-fuelled and therefore use a higher proportion of the metal in their autocatalysts, could hurt prices.

“In the last few months car production has started to pick up again,” he said. “The problem is that a lot of the car sales in Europe are artificially boosted by government incentive schemes. That is probably bringing demand forward, it’s not increasing demand.”

LONDON, July 31 (Reuters)

Companies posting solid results before the bell included AON Corp and industrial conglomerate Tyco International Ltd .

Goldman Sachs raised its recommendation on GE to “buy,” saying comments made by the chairman of a key congressional committee suggests a decreased chance of a break up of the finance arm of the diversified industrial manufacturer.

U.S. House Financial Services Committee Chairman Barney Frank in an interview with Bloomberg late on Wednesday suggested there was broadening support for regulatory reform that would not mandate the separation of GE Capital, Goldman analysts said.

GE shares rose 5.5 percent to $12.94 before the bell.

“A lot of this is a follow up of the resilience we’ve seen in the market over a couple of weeks. The clear sentiment is to be buying on any dips,” said Matt McCall, president of Penn Financial Group in Ridgewood, New Jersey.

“We get buying into the close on a consistent basis. The trend right now is higher. We have earnings improving, and that’s giving people the reason buy.”

S&P 500 futures rose 6.6 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures climbed 53 points, and Nasdaq 100 futures were 8.5 points higher.

Investor sentiment was also buoyed by signs that the global recession is abating following upbeat economic reports from Europe.

European stocks were up more than 1 percent after data showed July euro zone economic sentiment rose to its highest level in eight months, while German unemployment unexpectedly fell for the first time in July.

International Paper Co posted a 40 percent drop in second-quarter profit but said the worst of the economic downturn had passed, and it was seeing improvements in some markets. . IP shares rose 3.3 percent to $19 in premarket trading.

Motorola Inc shares rose 3.5 percent to $6.80 before the bell after the mobile phone maker swung to a quarterly profit.

Exxon Mobil Corp shares fell 1 percent after it reported second-quarter earnings.

The U.S. economic calendar includes the weekly report on initial jobless claims at 8:30 a.m. (1230 GMT). A Reuters survey of economists forecast claims to have risen to 570,000 from 554,000 the previous week.

Also on the calendar is a record $28 billion 7-year note auction from the U.S. Treasury, which could make investors cautious on the heels of poor demand for two government auctions this week.

NEW YORK, July 30 (Reuters)

Euro zone economic sentiment improved more than expected in June, data showed on Monday, as the European Commission predicted the worst could be over for the 16-country currency area.

“The ECB will find themselves affirmed that the economy is bottoming out and that the worst is over,” said Joerg Angele, analyst at Bayerische Landesbank.

“It’s bad, but it’s not getting worse.”

The FTSEurofirst 300 index rose 1 percent, led by energy companies and financials.

The MSCI world equity index edged up 0.12 percent towards 12-day highs hit on Friday. However, the index is down over 4 percent from the year’s highs set earlier this month.

U.S. stock index futures indicated a slightly higher open on Wall Street.

World stocks have shuffled sideways in the past few weeks as investors have questioned how quickly the global economy will return to growth, giving a boost to battered government bonds and pushing yields lower.

U.S. employment data are due on Thursday ahead of a U.S. holiday on Friday, and the European Central Bank and Sweden’s Riksbank issue policy statements this week.

“With the payrolls coming up, and the ECB and Riksbank, I don’t think there’s a great appetite to take on big risk this week,” said Maurice Pomery, managing director of Strategic Alpha.

Many investors are also sticking to the sidelines as the second quarter winds down and ahead of U.S. and European summer holidays.

CHINA WATCH

The dollar index, a gauge of its performance against six major currencies, dipped 0.05 percent to 79.833, but held off a two-week low struck on Friday.

The euro inched up 0.07 percent to $1.4059 , recouping losses earlier in the session, and the dollar was up 0.16 percent against the yen at 95.35 .

The dollar fell last week after China, which holds nearly $2 trillion of reserves believed to be concentrated in dollars, repeated its calls for an end to the dominance of a single currency in global finance.

China and Brazil said on the sidelines of a weekend meeting of central bankers in Basel they were discussing a currency arrangement to allow exports and importers to settle deals in local currencies, thereby avoiding the dollar.

Pressure from emerging market countries to seek an alternative to the dollar as reserve currency has contributed to weakness in the U.S. currency in recent weeks.

Crude oil rose 0.74 percent to $69.89 a barrel on supply concerns after Nigeria’s main militant group said it attacked a Royal Dutch Shell oil platform.

Euro zone government bond futures rose 20 ticks , helped by strong gains in UK gilts on month-end buying and weak UK data.

LONDON, June 29 (Reuters)

U.S. crude pricesraced above $71 a barrel, extending a 2 percent gain the day before, after rebel attacks on Nigerian oil facilities disrupted supply. Firmer oil prices supported metal prices, with gold edging above $940 to a one-week high.

Global equities were also in demand, with the MSCI world equity index advancing 0.9 percent and the pan-European FTSEurofirst 300 up 0.2 percent.

The MSCI world equity index is up more than 21 percent this quarter, on track for the biggest quarterly gain in its 20-year history.

“It is clear that the rebound in global equity markets has lost some steam,” Barclays Wealth said in a note.

“It appears to us that stocks are now broadly fairly valued, having erased their previous undervaluation faster than expected. Further share price gains may well relate more closely to the rate of underlying profit growth and the economic cycle.”

U.S. stock index futures were down between 0.2 and 0.3 percent, indicating a softer open on Wall Street.

Tokyo’s Nikkei average added 0.8 percent, shrugging off a record 1.1 percent fall in consumer prices in the year to May — another sign falling demand is pushing the economy deep into its second spell of deflation this decade.

“Most people will agree now that we won’t revisit the low point that we have seen this year any time soon,” said Luc Van Hecka, chief economist at KBC Securities.

“But there are still some problems to be resolved in the financial sector and as long as that is not out of the way in a convincing manner, we could still have intermediate corrections.”

UBS , the world’s largest wealth manager, said it planned to raise about 3.8 billion Swiss francs ($3.46 billion) by selling stock and expected to post a second-quarter net loss. The likelihood of a long road to global economic recovery remained a challenge to companies. Boeing Co , the world’s No. 2 plane-maker, suffered another heavy blow to its Dreamliner project when a major customer, Australia’s Qantas Airways , scrapped and deferred orders for 30 new planes.

DOLLAR SLIPS

The dollar fell against a basket of currencies, extending losses made the previous day after the U.S. Federal Reserve gave no hint of an imminent exit from low interest rates and other bold measures to stoke growth.

The euro was up 0.6 percent against the dollar at $1.4085, while the greenback fell 0.5 percent to the yen.

“Risk sentiment is back in full force,” said Christian Lawrence, currency strategist at RBC Capital Markets. “The dollar is being sold across the board.”

Yields on the benchmark 10-year U.S. Treasury added 2 basis points, while the 10-year euro zone benchmarkbund yield was unchanged at 3.428 percent.

In one measure of how investor sentiment has improved, the CBOE Volatility Index, a gauge of investor anxiety, on Thursday closed at its lowest level since just before Lehman Brothers filed for bankruptcy protection last September.

LONDON, June 26 (Reuters)

Dow component Boeing Co could weigh on the market after Australia’s Qantas Airways Ltd canceled orders for 15 new Dreamliner planes and deferred orders for another 15 in a new blow to the project.

Boeing fell 2.9 percent to $41.30 before the opening bell.

As investors try to assess the market’s next move after a sharp bounce, J.P. Morgan Securities said the S&P 500 index  is likely to fall to between 830 and 875 through September, given its virtually uninterrupted rise since its March lows.

The strategists also urged investors to use the correction to build positions in cyclical stocks. The index ended Thursday at 920.26.

The broad S&P had rallied as much as 40 percent from March’s 12-year low, but the run-up has stalled as initial optimism about a stabilizing economy has been tempered by worries the recovery could be tepid. The index is up about 36 percent from the March trough.

Data on tap for the day includes a report on personal income due at 8:30 a.m. EDT (1230 GMT) and consumer sentiment at 9:55 a.m. (1355 GMT).

S&P 500 futures eased 2.60 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futuresslipped 14 points, and Nasdaq 100 futures were off 4.50 points.

Palm Inc could boost technology shares after it posted a narrower-than-expected loss and said demand was strong for its new Pre smartphone. Palm jumped 11.9 percent to $15.69 in premarket trade.

Stocks could also be buffeted by end-of-quarter “window dressing as portfolio managers sell stocks with big losses and buy some of the quarter’s best-performing stocks to help improve their returns.

On Thursday, stocks rose on investor relief that Fed Chairman Ben Bernanke withstood a barrage of pointed questions from Congress on the Bank of America-Merrill Lynch deal relatively unscathed. Retailer and home builder shares led markets higher for much of the session.

NEW YORK, June 26 (Reuters)

Goldman Sachs added Microsoft Corp to its Americas ‘conviction buy’ list on improving revenue prospects, overshadowing a disappointing outlook from BlackBerry smartphone maker Research In Motion Ltd .

Shares of the software maker and Dow component rose 2.2 percent to $24.02 in premarket trading.

The Dow and S&P 500 snapped a three-day losing streak on Thursday as data on the job market and regional manufacturing revived hopes that the recession-hit economy is stabilizing.

“Sentiment is improving and a lot of people are taking the bet that the recession is over,” said Anthony Conroy, head trade for BNY ConvergEx, an affiliate of the Bank of New York, in New York.

Conroy added that the quarterly expiration and settlement of June equity options and futures, a convergence known as quadruple witching, will increase volatility throughout the session, possible pushing indexes higher.

S&P 500 futures rose 6.10 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futuresrose 52 points, while Nasdaq 100 futures advanced 12.25 points.

After gaining as much as 40 percent from a 12-year closing low in early March, the S&P 500 has retreated as investors reassessed the potential strength of an economic recovery. Thursday’s data revived some optimism, but analysts said real improvement is needed to sustain the rally.

Government data showed the number of people staying on jobless benefits fell for the first time since January, while manufacturing in the U.S. Mid-Atlantic region contracted much less than expected in June.

After the close on Thursday, Research In Motion issued an outlook that fell short of expectations, sending the stock down 1.2 percent before the bell, even as the company reported a rise in quarterly profit that topped forecasts.

NEW YORK, June 19 (Reuters)

Sales at U.S. retailers dropped 0.4%, the eighth monthly decline in the last 10 months, following a revised 1.3% drop in March that was larger than previously estimated.  Excluding auto dealers, sales fell 0.5%

Economists had expected an increase of 0.5% to 1.0%.  Since July, retail sales have shown increases only in January and February, and those were attributed to post-holiday sales.

The disappointing numbers indicate surging unemployment and the worst housing market in decades could temper consumers’ appetite for spending for years, analysts said. As long as consumer spending is muted, which accounts for about 70% of all economic activity, any recovery from the worst recession in over 50 years is likely to be slow and difficult.

“These numbers are certainly discouraging, a bit disheartening,” David Resler, chief economist at Nomura Securities (ADR NYSE: NMR) in New York, told Reuters.

The news sent U.S. stock index futures reeling to steep losses in New York trading, while government bond prices enjoyed their biggest gains in weeks.
There can be little doubt that soaring unemployment is curtailing consumer spending. Unemployed workers naturally cut back on purchases and recent statistics suggest those that are still working are increasing their savings rate.

Despite the fact that payrolls fell by only 539,000 workers in April, the smallest drop since October, the jobless rate climbed to 8.9%, the highest level since 1983. Economists surveyed this month by Bloomberg predicted the jobless rate would average 9.6% in 2010.

The same survey also showed consumer spending will be unchanged this quarter after rising 2.2% during the first three months of the year. Last month, economists had forecast spending would fall at a 0.5% annual pace in the second quarter.

“The second quarter is going to be tough,” Bill Cheney, chief economist at John Hancock Financial Services Inc. in Boston, said in a Bloomberg Television interview. “Consumers are losing their jobs, concerned about losing their jobs and losing wealth.”

Retail sales fell even as consumer confidence started to rebound. According to last month’s report by the Conference Board, a New York-based private research group, consumer sentiment jumped in April by the most since 2005.

Falling demand at electronics, furniture, clothing and grocery stores led the decline in sales.

Gas stations also reported falling receipts in April, even though fuel prices climbed, indicating Americans may be cutting back on driving just as the U.S. enters the usually busy summer months.

Imported petroleum prices were up 15.4% in April – the largest monthly rise since a 17% increase in March 2002 – after February and March figures were revised upwards to 5.3% and 7.9% respectively.

Sales at car dealers were among the few retailers to show an increase last month. Auto sales gained 0.2% after falling 2% in March.

Counter to an industry report last week, the government’s data said sales at clothing retailers decreased 0.5%.

According to last week’s report from the International Council of Shopping Centers, the New York-based trade group that measures sales at about 40 retail chains, April same-store sales rose 0.7%, the first gain since September.

Wal-Mart Stores Inc. (NYSE: WMT), the world’s largest retailer, said sales at U.S. stores open at least a year rose 5%. Other retailers that said first-quarter earnings exceeded their forecasts included Kohl’s Corp. (NYSE: KSS) and BJ’s Wholesale Club Inc. (NYSE: BJ).

Those reports had raised hopes that shoppers are returning to stores. But yesterday’s report had retailers preaching patience.

“We’re still working our way through the slowdown,” Mike Niemira, chief economist at the ICSC, told Bloomberg. “I think it will get better as the year progresses. The month of May will still be tough and I suspect by the summer that things will be a little broader in terms of the improvement.”

Source:  Plummeting Retail Sales in April Bury Economic “Green Shoots”

U.S. stock index futures fell on Thursday, pressured by a weak earnings season and worries that the $825 billion economic stimulus package could still face a bumpy road.

Shares of widely held Dow component Exxon Mobil were down 2.1 percent at $77.55 before the opening bell after Goldman Sachs removed the company from its Americas Buy list, saying it saw better investment opportunities among energy companies.

The U.S. House of Representatives passed President Barack Obama’s stimulus package late on Wednesday but despite the new president’s goal of bipartisanship, every Republican who voted opposed the bill. The Senate begins debate next week.

“It’s clear the Republicans don’t want to play ball with the Democrats, they want to do it their way,” said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.

“Any slowdown in the stimulus package is not going to be good. The market wants to see this passed, done, signed, in the bank and let’s move on to the next problem.

Investors were also watching for initial weekly jobless claims, due at 8.30 a.m. (1330 GMT). Worries over mounting job losses have been in the forefront this week as more companies have announced massive cuts as they attempt to stay afloat.

S&P 500 futures fell 9.20 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures were down 79 points, and Nasdaq 100 futures lost 4.75 points.

A gain in Ford Motor Co helped futures trim losses after the ailing automaker posted a loss but saw a lower cash burn rate than expected and reaffirmed it plans to go ahead without government loans. Ford was up 6.9 percent at $2.17.

Starbucks Corp (SBUX) was the latest company to say it will slash jobs when it reported lower quarterly profit after the bell on Wednesday as sales fell globally. The coffee chain’s shares were down 3.6 percent at $9.30.

Stocks rose on Wednesday as financial stocks soared on optimism the Obama administration was making progress on a plan to relieve banks of money-losing assets.

The Wall Street Journal reported on Thursday that government officials looking to revamp the financial bailout have discussed spending another $1 trillion to $2 trillion.

With Wednesday’s advance, the benchmark S&P 500 capped its fourth straight day of gains, its longest run-up in two months. Year to date, the benchmark S&P 500 is down 3.2 percent, a marked improvement from a 6.4 percent loss seen at Tuesday’s close. After starting 2009 up more than 20 percent from its Nov. 21 bear market low, the S&P is up 16.2 percent from that significant low.

NEW YORK, Jan 29 (Reuters)